A regional and economic union comprising 15 West African nations has expressed concerns over the use of crypto in the sub-region, calling attention to the potential risks associated.
According to a report by a news outlet on Thursday, the member nations said Bitcoin (BTC, -6.95%)’s decline in recent months was a reminder that cryptocurrencies are not safe-haven assets.
The comments came during a Parliamentary meeting of the joint committees of the Economic Community of West African States (ECOWAS) in Ouagadougou, Burkina Faso.
Several cryptocurrency experts and resource personnel were also present, according to the report.
The region has had a mixed affair with the nascent asset class. At times crypto has been the focus of viable use cases for the underserved and unbanked throughout the region. Earlier this year, Nigeria’s central bank ordered institutions under its purview to block accounts tied up in crypto, though it has since softened its stance.
ECOWAS also said that cryptocurrencies can be refused as payment without the necessary legal protections normally afforded to government-issued fiat.
Other risks were also attributed to crypto’s well-worn narrative including their volatile and speculative nature as well as a bag holder’s susceptibility to theft.
The union also said crypto’s insecure liquidity in comparison to the foreign exchange market’s $6.6 trillion flows and the fact that 96% of bitcoin are currently owned by 2.5% of users also presented risk.
CoinDesk was unable to determine where ECOWAS got its figures. Glassnode data show wallet addresses holding more than one bitcoin have been on the decline since the year began, while those holding less than one were increasing.